Contract 1 consideration


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Contract 1 consideration

  1. 1. Consideration
  2. 2. •Referred to as a badge of enforceability•It is mutuality of agreement, something be lost or gainby both the promisor/promissee (Currie v misa –detriment or forbearance suffered by promisor andpromissee)•Benefit or detriment is the consideration, thus it mustbe valuable•One sided promises amount to gift, something has to bepassed (Dunlup v Selfridge – nothing was passed fromthe promisee)•When consideration is not obvious, equity is usethrough estoppel (eringthon v eringthon – father diedafter having bought and promised his son and his wifethat he would transfer property in their name if they keptup mortgage payments. Other family members tried totake the house but was estopped because they werepaying the mortgage ).
  3. 3. Executory Consideration – future promises to dosomething like for example supplying goods for futureperformance• Re McArdle – where it was suggested that in consideration for carrying out alterations (though all the work on the house had been completed at the time the document was signed).Executed –similar to a unilateral contract where oneperson makes a promise for when the act is completed.• Carlill v Carbolic smokeball company
  4. 4. Must not be past – A gives b a ride and upon arrival B promises to giveA money for petrol. Promise not enforceable since the ride had alreadyhappened: •(Re MCardle, Plaintiff carried out work refurbishing a house that his siblings had beneficial interest. He asked them to contribute towards the cost, but this was not enforceable because work was completed before any promise of payment was made.Exception: Act constituting consideration must be done at thepromisor’s request •Lampleigh V Brathwaite – B killed a man and asked Lh to get him a pardon for a fee. Previous request and subsequent promise was treated as the same transaction
  5. 5. Must be sufficient, need not be adequate:having value means it is real/sufficient• Chapple v Nestle – special offer being made to obtain a record with three wrappers, copyright was owned by nestle who claimed breach, the wrappers represented sufficient consideration – courts not concerned whether the deal was bad)Must move from the promisee – to enforce something must beprovided• Tweddle v Atkinson – Father of a bride and groom promised to give them some money after they were married and he died. Son sued the executor but was unsuccessful because there was no consideration and he was not a party to the contract.
  6. 6. Performance of pre-existing duty – eg public dutycontrast with a person exceeding his duty• Collins v Godfrey – persons being paid to go testify when he had already been subpoena thereby having a legal duty to do soGlassbrook v Glamorgan CC – Officers protecting strikingminors but was asked to stay on the premises. They hada duty to perform but they are entitled to determine howthat duty would be performed.
  7. 7. Existing contractual duty – already bound under a contract•Stilk v Myrick-two sailors abandoned a ship and the captain agreed to pay the others if they would sail the ship back – unenforceable as they were already legally bound to do so and making a promise to sail back was not valid considerationWilliams & Rofley redefined this principle to say that if in thebargaining consideration their is a practical benefit (eg getting someadditional benefit – in this case Roffley would get a chance of thecompletion of the project on time (performance) and Williams wouldget an additional payment)
  8. 8. Pinnel’s Case – P was owed some money and the def paid a part of debt.This did not amount to valid consideration unless at the promisor’srequest it is made 1) before the due date; 2) with a chattel; 3) to a differentdestination • Exception: if something new is introduced into the relatinship it will be binding.Contract variation - Stilk v Myrick-two sailors abandoned a shipand the captain agreed to pay the others if they would sail the shipback – unenforceable as they were already legally bound to do so –contract could not be varied • Williams & Rofley redefined this principle to say that if in the bargaining consideration their is a practical benefit (eg getting some additional benefit – in this case Roffley would get a chance of the completion of the project on time (performance) and Williams would get an additional payment)
  9. 9. Equitable doctrine design to Requirements:stop a person from going •A pre existing contract/legalback on his promises not Lord Denning set the obligationsupported by consideration following principles: a •Unambiguous promise•High Trees case – deals with the promise intended to be •Change position modification of rent payable binding, intended to be •Must be equitable for promisor to during the second world war and go back on his promise acted on, in fact acted on, the promise to accept part was to accommodate the circumstances is binding in so far as its of the war and the principles in terms properly apply Pinnel’s case applied
  10. 10. Pre-existing •Combe v Combe – a husband promising to maintain wife. Not enforceable as estoppel was being used as a sword and not a contract/legal shield obligation •Promisee relied on the promise which provides the justification Clear unambiguous for enforcement - Hightrees promise •Promise is usually intended for the duration of the contract, however under estoppel the promise may be limited. Change position - Hightrees – the promise of the reduced rent is only good while the second world war continued. Must be inequitable •Baird v spencer – Plaintiffs sued Spencer for stopping them from supplying clothes for them for years , though there was nofor the promisor to go express contract. It failed as there was no certainty of contract and estoppel could not create its own cause of action and back on his promise provide a remedy